The Biggest Homeownership Hurdles for Millennials

Source: Liz Dominguez-RISMedia

Millennials should be making a sizable stamp in homeownership, but they have been largely absent from the housing space. Why is it that the largest generation in U.S. history isn’t participating in real estate as heavily as its predecessors? There are many difficulties standing in their way, according to new research.

A recent report by the Urban Institute, “Millennial Homeownership: Why Is It So Low, and How Can We Increase It?” delves deeper into the generational home-buying gap to assess the factors that are holding millennials back from their homeownership goals. When looking at the 25-34 age group, millennials are behind Gen Xers and baby boomers in homeownership rates by 8-9 percentage points, according to the report. When comparing overall homeownership rates in 2015, millennials were behind baby boomers by 42.8 percent and Gen Xers by 28.2 percent.

While factors such as parental wealth and creditworthiness play a role, there are more overarching influences on the millennial homeownership rate. The biggest obstacles?

Settling down is being pushed further out.
Millennials are delaying major life events such as marriage and childbearing. These milestones are typically associated with higher homeownership rates; in fact, the possibility of owning a home increases by 17.9 and 6.2 percentage points, respectively, for those who are married or have children.

According to the 2015 American Community Survey by the U.S. Census Bureau, 40 percent of millennials are married. This is 7.5 percent lower than the 2000 rate for similar age groups, and 13.8 percent lower than the 1990 rate. The average marriage age is being pushed out further out: Between 1990 and 2015, the proportion of 18- to 34-year-olds who never married increased by nearly 20 points to 53.9 percent. Many millennials are also waiting longer to have children. Between 1990 and 2015, the proportion of married households with children (with a household head age group of 18-34) decreased from 36.9 percent to 25.7 percent.

High student loan debt is tightening millennials’ wallets.
When compared to preceding generations, millennials are more likely to pursue higher education. According to 2015 rates, 65.8 percent of millennial household heads received some level of college education, a 10.1 percentage point increase from 1990 and a 13.3 point increase from 2000.

However, rising education costs have far exceeded income increases, creating a debt challenge. An estimated 36 percent of millennials have student loan debt, compared to 18 percent of Gen Xers and 4.1 percent of baby boomers.

Data from the Federal Reserve Bank of New York show that a 25-year-old’s average education debt has increased from $4,516 in 2003 to $10,033 in 2015. These high levels of debt are proving to be homeownership barriers for millennials who are struggling to save for a down payment while paying off their loans. They also increase debt-to-income ratios, potentially making it more difficult for them to obtain a mortgage.

Exorbitant home values are pricing them out of homeownership.
Members of the millennial generation, especially those with higher levels of education, typically flock to more populous locations, such as New York City and San Francisco, in search of high-skilled cities with employment opportunities and urban amenities. These areas tend to be more expensive, with low housing elasticity due to a shortage of new construction for starter homes, the report states.

Additionally, many millennials are rent-burdened, paying more than 30 percent of their income toward rent, leaving them less room in their budget to save for a down payment. According to research by the Pew Charitable Trust, the transition to homeownership is slower for rent-burdened individuals. The demand and pricing for rental housing dramatically increased after the financial crisis.

The racial divide remains a far-reaching challenge.
Millennials are the most racially and ethnically diverse generation. The increasing share of minority members, and the added home-buying challenges they experience, is lowering millennial homeownership rates on average, cites the report. According to 2015 statistics, white households represent the highest share of homeowners, making up 39.6 percent of all households. Meanwhile, the Hispanic homeownership rate decreased to 24.6 in 2015, and the black homeownership rate has been in continuous decline since 2000, sitting at 13.4 percent in 2015. The Asian household rate has fluctuated, dropping between 1990 and 2000 from 30.6 to 26.6 percent, before increasing to 27.2 percent in 2015.

How can the industry overcome these challenges?
According to the report, many potential homebuyers are not aware of down payment assistance, especially first-time buyers. The first step to correcting this problem? Increasing awareness of government-sponsored programs through financial education as part of a high school or college curriculum.

Additionally, the Urban Institutes proposes a streamlined and tech-centered mortgage application that shortens the process and more thoroughly assesses risk. The underwriting process should also be revised to include factors not typically within a credit score assessment, such as rental payment history, in order to assist consumers with low credit or a lack of credit history. Other proposed solutions take the form of revised student loan debt reporting, changes to land-use and zoning regulations, and reduced racial and ethnic disparities.

Brokers Seeing “Simple Economic Recipe For a Softening Housing Market”

Source: NWMLS

KIRKLAND, Washington (July 5, 2018) – Home buyers around many parts of Washington state had
more choices and less competition during June, prompting some industry leaders to comment on “a
feeling of change in the market.”

“Inventory is up and demand has dropped,” reported Robert Wasser, an officer with the board of directors
at Northwest Multiple Listing Service. That combination is “a pretty simple economic recipe for a
softening market,” he added in commenting on the latest MLS statistics.

Figures for June show a 5.2 percent improvement in the number of active listings system-wide, coupled
with drops in the volume of pending sales (down 8.4 percent) and closed sales (down .07 percent)
compared with a year ago. Despite the shift of some indicators favoring buyers, prices area-wide
continued to rise, increasing more than 10 percent from twelve months ago.

“There was a feeling of change in the market this June and the numbers supported that feeling,” remarked
John Deely, principal managing broker at Coldwell Banker Bain. He noted many brokers also reported an
increase in properties going past their offer review date, more price reductions, and an increase in reverse
prospecting (a tool that allows the listing broker to view a list of brokers with potential buyers for that
listing). “We’re also experiencing a decrease in multiple offers and the number of buyers participating in
multiple offers,” added Deely.

Northwest MLS brokers added 13,153 new listings to inventory during June, a drop from both a year ago
when they added 13,658, and from May when 14,524 new listings were added. With new listings
outgaining sales, total inventory as measured by active listings and months of supply improved.

At month end, Northwest MLS reported 15,234 active listings and 1.5 months of supply. Inventory of
single family homes and condos reached its highest level since October. The supply of active listings in
King County surged 47 percent from a year ago, boosting the months of supply to just under 1.3 months –
the highest level since September 2016 when there was 1.37 months of supply.

“Although still a quick response market, with more new listings coming on the market during the summer
months, we experienced dispersed buyer energy due to the greater availability and selection,” stated J.
Lennox Scott, chairman and CEO of John L. Scott Real Estate. He estimates sales activity is off 15-to-20
percent for each new listing’s first 30 days on the market. “Now through October will be the best time of
year for homebuyers,” he remarked.

“Sellers are becoming more active in the market as they sense buyers pulling back,” suggested George
Moorhead, designated broker and owner at Bentley Properties. Improving supply, a marked increase in
expired or cancelled listings, and market times almost doubling are factors he mentioned when describing
the market as “more than just lackluster” with summer showing no sign of improvement.

June Is National Homeownership Month

Source:  Liz Dominiguez/RISMedia

June is National Homeownership Month, and the industry is recognizing the importance of homeownership as a milestone of the American Dream.

This year’s theme, set by the Department of Housing and Urban Development (HUD), is “Find Your Place.” HUD is one of many agencies that provide resources to help consumers obtain and sustain homeownership. Through its network of housing agencies, consumers can seek out counselors for homeowner education, foreclosure prevention and budgeting assistance. With mortgage options through the Federal Housing Administration (FHA), consumers with low credit or low-down payment funds can reach their homeownership goals faster—a significant method of aid for millennials and upcoming buyer generations flooded with student loans, making it difficult to amass the funds needed for conventional financing. According to HUD, over 47 million homeowners since 1934 purchased a home with a mortgage insured by FHA, and around 40 percent of all borrowers purchase their first home using an FHA loan.

“Homeownership serves as an enduring symbol of security and prosperity, and it provides many Americans with a legacy they can pass down to their children and grandchildren,” said HUD Secretary Ben Carson in a statement. “During National Homeownership Month, we recognize the abiding value of owning a home, and we rededicate ourselves toward helping hard-working families to find their place in the American dream.”

Although homeownership rates are currently stalled at 64.2 percent, experts say the lack of dramatic increase is a reflection of a market that is withstanding challenges such as low inventory and rising interest rates. While the number has not moved much since the first quarter of 2017, there have been gradual increases since 2016, following a significant drop after the housing crisis.

While the National Association of REALTORS® (NAR) celebrates its commitment to homeownership year-round through resources provided on its Homeownership Matters and HouseLogic sites, NAR President Elizabeth Mendenhall recognized June as a pivotal time to reaffirm the association’s mission to promote homeownership.

“National Homeownership Month is a time to celebrate and promote the modern American Dream of owning a home,” said Mendenhall in a statement. “Homeownership changes lives and enhances futures, and many Americans see it as one of their greatest hopes. These individuals are counting on the nation’s 1.3 million REALTORS® to champion and protect homeownership and help make it more affordable, attainable and sustainable. REALTORS® pledge to continue to lead efforts to ensure that the dream of homeownership is not only possible, but very real, for any and all who want to achieve it, so they can have a place of their own to make memories, start growing their financial futures, and build strong communities.”

In addition, Freddie Mac’s website for National Homeownership Month provides valuable resources for homeowners, such as educational articles, homeownership program statistics and opportunities consumers can take advantage of in order to make their homeownership dream a reality.

According to the National Association of Home Builders (NAHB), primary residences are ahead of all other financial assets, business interests and retirement accounts, accounting for nearly one-quarter of all assets held by households in 2016, as reported in the latest edition of the Federal Reserve’s Survey of Consumer Finances.

“Homeownership is a primary source of net worth for many Americans, and is an important step in accumulating personal financial assets over the long term,” said Randy Noel, chairman of the NAHB, in an interview on NAHBNow.

In recognition of National Homeownership Month, NAHB is making a toolkit available for its members; the toolkit includes a video on the value of homeownership, sample social media posts, radio scripts and other talking points, relevant articles, and even print ads showcasing the benefits of homeownership.

Citing the passing of the Economic Growth, Regulatory Relief and Consumer Protection Act and this past year’s tax reform bill as recent progress, President Donald Trump released a statement pledging the administration’s commitment toward increasing homeownership incentives across the country:

“During National Homeownership Month, we affirm the joy and benefits of homeownership. For millions of Americans, owning a home is an important step toward financial security and achieving the American Dream. My Administration is committed to fostering an economic environment in which every family has the opportunity to enjoy the sense of pride and stability that can come with owning a home.”

Home Prices: Boom Continues, but Leveling Out Needed

Source: RISMedia

The boom is continuing for home prices, with a gain in March of 6.5 percent, according to the S&P CoreLogic/Case-Shiller Indices.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), rose 6.5 percent year-over-year, an increase from 6.4 percent in February. The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 6.8 percent year-over-year, which is comparable to February. Month-over-month, both the 10-City Composite and the 20-City composite rose, 0.9 percent and 1 percent, respectively.

“The home price increases continue, with the National Index rising at 6.5 percent per year,” says David M. Blitzer, chairman and managing director of the S&P Dow Jones Indices Index Committee.

“Looking across various national statistics on sales of new or existing homes, permits for new construction, and financing terms, two figures that stand out are rapidly rising home prices and low inventories of existing homes for sale,” Blitzer says. “Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s before the housing boom and bust.

“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” says Blitzer. “Compared to the price gains of the last boom in the early 2000s, things are calmer today.”

“The solid gain in home prices of 6.5 percent in March added roughly $150 billion to housing wealth during the month,” said Lawrence Yun, chief economist at the National Association of REALTORS® (NAR), in a statement. “The continuing run-up in home prices above the pace of income growth is simply not sustainable. From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent, while the average wage rate has grown by only 14 percent. Rising interest rates also do not help with affordability; therefore, more supply is needed to level out home prices. Homebuilding will be the key as to how the housing market performs in the upcoming years.”

The complete data for the 20 markets measured by S&P:

Atlanta, Ga.
Month-Over-Month (MoM): 0.8%
Year-Over-Year (YoY): 6.2%

Boston, Mass.
MoM: 1.2%
YoY: 5.8%

Charlotte, N.C.
MoM: 1%
YoY: 6.2%

Chicago, Ill.
MoM: 1.1%
YoY: 2.8%

Cleveland, Ohio
MoM: 0.3%
YoY: 4.6%

Dallas, Texas
MoM: 0.7%
YoY: 5.8%

Denver, Colo.
MoM: 1.4%
YoY: 8.6%

Detroit, Mich.
MoM: 1.1%
YoY: 7.9%

Las Vegas, Nev.
MoM: 1.5%
YoY: 12.4%

Los Angeles, Calif.
MoM: 0.9%
YoY: 8.1%

Miami, Fla.
MoM: 0.7%
YoY: 5%

Minneapolis, Minn.
MoM: 1.7%
YoY: 6.1%

New York, N.Y.
MoM: 0.1%
YoY: 5.2%

Phoenix, Ariz.
MoM: 0.9%
YoY: 6.8%

Portland, Ore.
MoM: 1%
YoY: 6.7%

San Diego, Calif.
MoM: 1%
YoY: 7.7%

San Francisco, Calif.
MoM: 2.1%
YoY: 11.3%

Seattle, Wash.
MoM: 2.8%
YoY: 13%

Tampa, Fla.
MoM: 0.6%
YoY: 7.5%

Washington, D.C.
MoM: 1.1%
YoY: 3%

Confidence in Housing at New Peak

Source: Suzanne De Vita RISMedia

Confidence in housing is at a new peak, with enthusiasm among sellers soaring, according to the April Fannie Mae Home Purchase Sentiment Index® (HPSI). At 91.7, the Index plowed through its previous record, climbing 3.4 percentage points month-over-month and five points year-over-year.

“The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home-buying season,” says Doug Duncan, chief economist and senior vice president at Fannie Mae.

What is driving the lift? Americans are optimistic about their prospects for selling, with 45 percent believing now is ideal to list—a high point since the start of the survey. By the same token, almost half (49 percent) of Americans believe home prices will rise—conditions that, for sellers, translate to an upper hand.

Confidence can dissipate, however, if inventory remains sparse, according to Duncan.

“High home prices and good economic conditions helped push the share of Americans who think it’s a good time to sell to a fresh record-high; however, the upward trend in the good-time-to-sell share seen since last spring has done little to release more for-sale inventory,” Duncan says. “The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales.”

Despite constrained inventory, sales are strengthening, with both existing and pending sales squeezing out wins in March, the National Association of REALTORS® (NAR) reported—and, according to the Commerce Department, new-home sales tracked up.

The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).

Brokers report some good news for home buyers, but still expect Puget Sound’s “frantic market” to continue

Source: NWMLS

KIRKLAND, Washington (May 7, 2018) – Home buyers may be cheered by an uptick in inventory, but the
improving supply is unlikely to reverse rising prices, suggest industry leaders from Northwest Multiple
Listing Service.

Commenting on just-released figures for April, which showed the highest level of active listings since
August, OB Jacobi, president of Windermere Real Estate said, “For the first time in a long time we had
good news for buyers.” Noting supply is still lower than year-ago levels (down 5.6 percent), it jumped 14
percent from March, which Jacobi said “is a pretty significant increase even for this time of year.”

Northwest MLS brokers added 11,271 new listings to inventory during April, a gain of 6.3 percent when
compared to March, and up nearly 5.9 percent versus a year ago. April’s pending sales (mutually accepted
offers) totaled 10,574, improving on the same month a year ago and the previous month.

At month end, the active listings selection included 10,079 single family homes and condos, eclipsing the
total of 8,825 listings at the end of March. The condo segment grew 10.9 percent from March.

Of the 23 counties in the Northwest MLS service area, only six of them reported year-over-year gains in
inventory compared to a year ago. King County was the only one in the Puget Sound region to notch a gain,
up 13.6 percent from a year ago.

Commenting on the uptick, Mike Grady, president and COO, Coldwell Banker Bain, remarked “We are
still WAY below a balanced market of five months of inventory, and this is even with interest rates ticking
slightly upward.”

Area-wide there is 1.3 months of supply, with 4-to-6 months used as a gauge of a balanced market. Three
counties – King, Kitsap, and Snohomish — reported less than a month of supply. The condo component
remains very tight with slightly more than three weeks (0.87 months) of supply.

Prices are still climbing at double-digit rates in most counties. Year-over-year prices for single family
homes and condos combined jumped about 15.3 percent overall, from $360,000 to $415,000. Within the
four-county Puget Sound region, King County notched the biggest gain at nearly 18.2 percent. Prices there
rose $100,000 from a year ago, from $550,000 to $650,000.

“There’s little reason to think we’ll be seeing a change in this frantic market anytime soon,” commented
Grady, citing double-digit appreciation in many of the most populous counties, expansion plans by Alaska
Airlines and Amazon, and other positive economic news as reasons for that expectation.

Existing-Home Sales Strengthen

Source: RISMedia

Building on February’s gains—and for the second time this year—existing-home sales have strengthened, the National Association of REALTORS® (NAR) reports. March sales increased 1.1 percent to 5.6 million, but they were down 1.2 percent from the prior year. Inventory increased, as well: 5.7 percent to 1.67 million, but 7.2 percent lower than the prior year.

“Robust gains last month in the Northeast and Midwest—a reversal from the weather-impacted declines seen in February—helped overall sales activity rise to its strongest pace since last November at 5.72 million,” says Lawrence Yun, chief economist at NAR. “The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year-ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford.”

Currently, inventory is at a 3.6-month supply. Existing homes averaged a brisk 30 days on market in March, four days less than the prior year. All told, 50 percent of homes sold were on the market for less than one month.

“REALTORS® throughout the country are seeing the seasonal ramp-up in buyer demand this spring, but without the commensurate increase in new listings coming onto the market,” Yun says. “As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.”

The metropolitan areas with the fewest days on market and most realtor.com® views in March, according to realtor.com’s Market Hotness Index, were San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; Midland, Texas; and San Jose-Sunnyvale-Santa Clara, Calif.

The median existing-home price for all house types (single-family, condo, co-op and townhome) was $250,400, a 5.8 percent increase from the prior year. The median price of an existing single-family home was $252,100, while the median price for an existing condo was $236,100.

Existing-home sales in the single-family space came in at 4.99 million in March, a 0.6 percent increase from 4.96 million in February, but a 1 percent decrease from 5.04 million the prior year. Existing-condo and -co-op sales came in at 610,000, a 5.2 percent increase from February, but a 3.2 percent decrease from the prior year.

Twenty percent of existing-home sales in March were all-cash, with 15 percent by individual investors. Four percent were distressed.

Two of the country’s major regions had higher sales, rising 5.7 percent to 1.29 million in the Midwest, with a8 median price of $192,200, and 6.3 percent to 680,000 in the Northeast, with a median price of $270,600. The South and West had reduced sales, falling 0.4 percent to 2.4 million in the South, with a median price of $222,400, and 3.1 percent to 1.23 million in the West, with a median price of $377,100.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets, especially those out West,” says Yun.

First-time homebuyers comprised 30 percent of existing-home sales in March, up from 29 percent February.

“First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range,” says NAR President Elizabeth Mendenhall. “Supply conditions improve in higher-up price brackets, which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search.”

According to Keller Williams Chief Economist Ruben Gonzalez, existing-home sales are on a familiar track.

“We continue to forecast that existing-home sales in 2018 will be at or slightly below 2017 sales,” says Gonzalez. “If inventory conditions remain restrictive, we also expect to continue to see home price appreciation accelerate. Based on data and anecdotal evidence, the most restrictive inventory conditions currently exist for entry-level housing, and this is also where we anticipate the most acceleration in home price appreciation.”

For more information, please visit www.nar.realtor.

Home buyers, sellers feel “looming pressure” but Western Washington market stays strong

Source: NWMLS

KIRKLAND, Washington (March 6, 2018) – Interest rates are creeping up, inventory is still squeezed, and
some feared revised tax laws would have a chilling effect on home sales, but Northwest Multiple Listing
Service leaders say the local market remains competitive.

“It seemed like there would have been a chilling effect on the real estate market at the start of 2018 with the
newly revised tax laws limiting mortgage interest deductions,” suggested Gary O’Leyar, designated broker
and owner at Berkshire Hathaway HomeServices Signature Properties. “Not only did the revisions not have
a chilling effect, if anything, the local market has been even hotter and more competitive than last year at
this time,” he added in commenting on new MLS numbers summarizing February activity.

Northwest MLS figures for last month show a slight year-over-year decrease (about 2.8 percent) in overall
pending sales, a likely consequence of inventory being down nearly 12.9 percent. Other key indicators of
the market – new listings, closed sales, and selling prices – all showed gains in February compared to 12
months ago.

The just-released report from Northwest MLS shows 7,980 pending sales last month, down from the
year-ago volume of 8,209 mutually accepted offers for single family homes and condos. Thirteen of the 23
counties in the report had more pending sales than at this time last year.

Closed sales outgained last year’s volume, 5,548 to 5,358, for an increase of nearly 3.6 percent. Median
prices on those sales surged almost 14.8 percent area-wide, rising from the year ago figure of $335,515 to
last month’s price of $385,000.

Among the four Puget Sound area counties, Snohomish had the largest year-over-year price increase at 18.8
percent. Its countywide median price for February’s sales spiked to $460,000 from $387,250, but that is
$130,000 below the $590,000 median price for transactions that closed in King County last month.
For single family homes (excluding condos), prices rose 13.7 percent overall, from $343,000 to $390,000.
Within King County, the median price was $649,950, with three areas (Mercer Island, Bellevue west of
I-405, and Kirkland-Bridle Trails) reporting median prices of more than $1 million for single family homes.
“As was the case the last two years, home values spiked in February, thanks to a cyclical low point in
supply,” commented Robert Wasser, owner/broker at Prospera Real Estate. Prices are now back around the
peak levels of last summer, and cyclically speaking, are headed for additional increases until summer
arrives,” commented Wasser, a board member at Northwest MLS.

Brokers added 7,284 new listings of single family homes and condos during February, an improvement of
nearly 6.4 percent from a year ago when they added 6,848 new listings. Like many months during 2017, last
month’s pending sales (7,980) outgained new listings (7,284), keeping inventory depleted in many areas.

Home buyers still competing for sparse inventory in Western Washington, driving up prices – especially for sought-after condominiums

Source: NWMLS

KIRKLAND, Washington (February 5, 2018) – “The Seattle area real estate market hasn’t skipped a beat
with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the
latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight
year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of
inventory.

Deely, the principal managing broker at Coldwell Banker Bain in Seattle and a board member at Northwest
MLS, noted a shift in the ratio of pending sales to new listings in King County.
Member brokers added 6,805 new listings of single family homes and condominiums to the system-wide
database last month for a gain of about 4.6 percent from a year ago. During the same period, they reported
7,820 pending sales. In King County, the number of new listings outgained pending sales for the first time
since September:

 

“Sellers that have put their properties on the market early this year have less competition and are seeing
multiple offers. Open houses are experiencing heavy traffic with hundreds of potential buyers attending,”
reported Deely.

For the MLS overall, last month’s 7,820 pending sales marked a slight increase compared to January 2017
when members reported 7,724 mutually accepted offers, a gain in of 1.24 percent. Not all areas reported
increases. Of 23 counties served by Northwest MLS, eight counties, including three in the Puget Sound
region (King, Kitsap and Snohomish), reported fewer pending sales than a year ago. In King County, where
acute inventory shortages exist in many neighborhoods, pending sales dropped 7.5 percent and closings
dropped 18.5 percent.

“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the
ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB
Jacobi, the president of Windermere Real Estate.

With January’s additions, the number of total active listings at month end stood at 8,037 homes and condos,
down nearly 17.6 percent from a year ago when the selection totaled 9,750 listings. Measured by months of
supply, there was only about 1.5 months overall, well below the 4-to-6 month level many industry experts
use as a gauge of a balanced market.